N542 Module 8 assignment: business case for a nurse-led service, a full sample

Fewer Cancellations on the Morning of Surgery: A Business Case for a Nurse-Led Preadmission Clinic

Student Name

Master of Science in Nursing Program, Aspen University

N542: Health Care Finance and Economics

Instructor Name

Month Day, Year

Fewer Cancellations on the Morning of Surgery: A Business Case for a Nurse-Led Preadmission Clinic

Executive Summary

A composite 260-bed community hospital performs about 7,200 elective surgical cases a year. Among the roughly 2,500 patients classed as higher risk by the anesthesia department, 12% of scheduled cases, about 300 a year, are canceled on the day of surgery, most often for reasons that could have been found earlier: an anticoagulant not held, an uncontrolled blood sugar, a missing cardiac evaluation or a patient who ate breakfast. This proposal requests funding for a nurse-led preadmission clinic that would see these patients one to three weeks before surgery. The clinic would cost $328,400 a year after a one-time setup cost of $25,000. If it cuts cancellations among these patients in half, it would return $412,500 a year in recovered surgical capacity and avoided waste, a recurring net benefit of $84,100 and a first-year net of $59,100.

The Problem

Day-of-surgery cancellations waste resources that are already committed. Staff, anesthesia and a sterile room are ready, and the patient has often taken a day off work and arranged a ride. When the case is canceled late, the room is often idle, because another patient cannot be prepared on short notice. The cost of that idle time is high. In an analysis of California hospitals, Childers and Maggard-Gibbons (2018) estimated the mean cost of one minute of operating room time at $37.45 in the inpatient setting and $36.14 in ambulatory surgery, with wages and benefits making up about two thirds of the direct expense.

The hospital currently relies on a phone call from a perioperative nurse two days before surgery. The call catches some problems but cannot examine the patient, draw laboratory work, or give enough time to arrange a cardiology visit or a change in anticoagulation. A review of last year's 300 cancellations among higher-risk patients found that about two thirds were for patient preparation or medical optimization reasons that an in-person visit would likely have identified.

The Proposed Service and the Evidence

The clinic would be staffed by two registered nurses with perioperative experience and a half-time scheduler, with a nurse practitioner or anesthesiologist available for consultation one day a week. Nurses would take a structured history, review medications with specific instructions on what to stop and when, order tests according to the anesthesia department's guideline, arrange consultations when needed and teach patients about fasting and the day of surgery. Patients with complex problems would be flagged to anesthesia for review.

Evidence supports the model. In a retrospective study of 6,524 cases at one academic center, Ferschl et al. (2005) found that patients seen in an anesthesia preoperative clinic had markedly fewer cancellations than those who were not: 5.3% versus 13.0% in the general operating rooms and 8.4% versus 16.2% in the same-day surgery suite, along with earlier room entry for first cases. That clinic was directed by anesthesiologists, and the study was not randomized, so patients who attended may have differed from those who did not. Still, the size of the difference, more than halving cancellations, supports the assumption used below.

Financial Analysis

The table sets out the clinic's annual costs, the benefits under the base case, and the result.

The largest benefit is recovered capacity, not saved cost. An avoided cancellation lets the hospital perform a case in time that would otherwise have been wasted, and each additional case contributes to the hospital's fixed costs. The analysis assumes that 70% of the time freed by avoided cancellations is used for another case, because patients seen in the clinic can be scheduled with confidence and the surgical services team can fill the schedule further in advance. It uses a contribution margin of $3,500 per case, the hospital's average for elective surgery after variable costs. Only the day-of-surgery preparation, pharmacy and supply waste, estimated at $300 per cancellation, is a direct saving.

Sensitivity and Risk

The clinic breaks even when it avoids about 119 cancellations a year, which would mean cancellations among higher-risk patients falling from 12% to about 7.2%, well short of the halving reported in the published study. The result is more sensitive to how much recovered time is used. If only half of the freed time were refilled, each avoided cancellation would be worth $2,050 rather than $2,750, and the clinic would run a deficit of about $20,900 a year at 150 avoided cancellations. The hospital therefore should not open the clinic without a plan from surgical services to schedule into the recovered time.

Two other risks matter. Referral volume could fall short if surgeons' offices do not send patients early enough, so the clinic should be built into the surgical scheduling process rather than offered as optional. And the clinic will change test ordering, likely reducing low-value preoperative tests. That reduction benefits patients and payers but may slightly reduce outpatient laboratory revenue; it should be presented as an intended effect, not a hidden cost.

Quality and Patient Benefits

The financial case is modest; the quality case is strong. Patients who are prepared are safer: anticoagulants are managed deliberately, blood sugar is controlled before the incision and patients arrive knowing what to expect. Fewer cancellations spare patients a wasted day and repeated fasting, and they give surgical teams a more reliable schedule. A nurse-led model also places a skilled registered nurse at the point where a surgical patient's medical, social and educational needs first come into view. Finkler et al. (2013) argue that nurse leaders should present such benefits alongside the numbers rather than after them, because decisions about nursing services are rarely made on finances alone.

Recommendation and Measures

The recommendation is to fund the clinic for a one-year pilot for higher-risk patients, conditional on surgical services committing to schedule recovered time. Monthly measures will include the day-of-surgery cancellation rate for clinic and non-clinic patients, reasons for each cancellation, the percentage of higher-risk patients seen at least five days before surgery, first-case on-time starts and patient satisfaction with preparation. At twelve months, the hospital should compare actual avoided cancellations and refill rates with this case and decide whether to extend the clinic to all elective patients.

Conclusion

A nurse-led preadmission clinic addresses a costly, visible failure: surgery canceled on the morning it was meant to happen. On reasonable assumptions, the clinic pays for itself and returns about $84,100 a year, mainly by recovering operating room capacity, and it breaks even well below the effect reported in published research. Its greater value is in safer, better prepared patients. For a nurse manager making the case, the lesson of this course is that the financial and clinical arguments work best together, each stated honestly with its assumptions and risks.

References

Childers, C. P., & Maggard-Gibbons, M. (2018). Understanding costs of care in the operating room. JAMA Surgery, 153(4), Article e176233. https://doi.org/10.1001/jamasurg.2017.6233

Ferschl, M. B., Tung, A., Sweitzer, B., Huo, D., & Glick, D. B. (2005). Preoperative clinic visits reduce operating room cancellations and delays. Anesthesiology, 103(4), 855-859. https://doi.org/10.1097/00000542-200510000-00025

Finkler, S. A., Jones, C. B., & Kovner, C. T. (2013). Financial management for nurse managers and executives (4th ed.). Elsevier Saunders.